the following data was taken from the income statement and balance sheet at the

Question

the following data was taken from the income statement and balance sheet at the end of the current year of Kaczynski corp
The net income was $900,000
Building. $1,000,000
Acc dep
building         125,000
cash.              245,000
Marketable
securities.      185,000
Accounts
receivables.    124,000
Allowance
for uncollectable
accts.                  4,000
Merchandise
inventory.           105,000
supplies.               2,000
prepaid
insurance.             3,000
accounts
payable.               100,000
accrued
liabilities.                20,000
mortgage
payable.                  18,000
Common stock,    300,000
$3 par value
paid in capital
in excess of par
common.                75,000
retained
earnings.                 225,000
Required
Determine the following
1.Current ratio
2.Quick ratio
3 . Earnings per share

Explanation / Answer

Answer:

1. Current ratio=Current Asset/Current Liability

Current ratio=245000+185000+120000+105000+2000+3000

=660000

Current liabilities=100000+20000+18000=138000

CR=660000/138000

=4.78 times

2. Quick ratio=QA/CL

=(660000-108000)/138000=4 times

3. Earnings per share=Net income/No of shares outstanding

=900000/100000

=$9 per share

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